Turbo Tax: A Good Alternative for Home and Business Software

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Comparisons Between the IRS and This Easy to Use Software

Turbo Tax, one of the three leading refund tax preparation sites excels in their online software for those needing home and business help.

The tax wars are on as the tax season has officially opened. On January 15, 2010 the IRS opened its free E-file service for those making $57,000 or less. They offer the ability to use many of their free forms and to help middle to low income people fie. The IRS offers online tax help for millions each year.

Turbo Tax on the other hand has a new marketing campaign: "Try before you buy." They guarantee in writing that the taxpayer will have the biggest tax refund ever. As these two websites are competing for business, which one really outweighs the other one?

 

Tax Preparation Software for Home and Business

Turbo Tax home and business preparation software is a wonderful tool for both the self employed and small business owner. It is a very detailed program with step by step instructions. It gives the taxpayer the option of posting on their own or taking the guided tour. There are lots of instructions and explanations along the way to help everyone get

They have made it the easiest way to prepare the taxes in the comfort of the home. A complete 100% guarantee gives satisfaction to the taxpayer also. Some of the benefits of this program are:

• Free E-File (this is not available to Americans living abroad).
• Easy to use, easy to import, easy to file.
• Includes all the forms you need.
• Includes the federal 1040 also (state is extra).
• Checks for audit flags.
• Looks for the largest refund for credits, investments and rental property.
• Handles step-by-step calculations of the self-employed.

 

Disadvantages of Turbo Tax Preparation for Home and Business

As with any program there are some disadvantages with this program. Compared to the advantages they may be considered small, but should be noted for everyone to consider. There main disadvantages are technical in nature.

• The tax is not disclosed to the taxpayer when agreeing to purchase the program.
• There are additional charges for talking to an expert; audit guarantee and having an expert check the file for accuracy.
• The online community group is not well organized and few questions are answered.
• Ask Tina (computer generated customer service gal) has only basic information available.

 

IRS Free E-File Service

Over four million taxpayers will take advantage of the free service that the IRS offers. It is the ability to file taxes over the Internet for free if qualified. There are income limitations, but many do qualify. All the forms are supplied and it is easy to input. The danger with this program is that it does not have all the "bells and whistles" that the Turbo Tax program has for small business owners.

This type of program is perfect for the young taxpayer with few deductions and maybe an EIC (earned income credit). Anyone with a business or who is self-employed should seriously consider both programs before deciding.

Resources

Turbo Tax
IRS E-File

Where to Find Free Tax Return Help

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Online Sites Offering E-file Taxes and Anticipated Refund Loans

Tax season has officially arrived and the question of the day is: Where is free tax return help? There are many places to seek help, including the IRS.

Free tax return help is on the way. It is not only available, but also a great marketing campaign for all the top tax preparers across the Internet. What a great way to get business to the website. For instance TurboTax is offering free tax return preparation on the simple 1040ez and the 1040.

 

Where to Find Free Tax Return Help

Many sites are competing now, but none can compete with the IRS on giving a free e-file or rapid tax filing for anyone who makes less than $57,000 a year in income. Free File Fillable Forms also offers a free e-file for those who need to file a 1040, 1040ez, 1040A.

For those who simply want to do it on their own, they can contact the IRS and order up to ten forms. The forms will be mailed within a ten day period to the taxpayer. There is also a way to download the forms for free by contacting the IRS here. The top three companies for online tax help are TurboTax, H & R Block and TaxACT. They all have

 

Free Tax Help for People from Volunteers

1. VITA or Volunteer Income Tax Assistance Program is run by the IRS. Free help is available for those who make less than $49,000 per year in income. Call 1-800-829-1040 to locate a nearby site.
2. TCE or Tax Counseling for the Elderly also offers free help for people with low to moderate incomes. The telephone number for TCE is 1-888-227-7669. This is part of the AARP program.
3. AFTCor the Armed Forces Tax Council offers free tax help for the military also. There are offices both overseas and in the USA. This program helps the military of all the branches to receive their refund through direct deposit in one week. To locate the local office of the AFTC call the IRS at 1-800-829-1040.

 

Which Online Sites Offer Free E-file for Taxes

All the sites that offer free tax return help will offer free e-file taxes. The main ones are H & R Block, TurboTax, TaxACT and the IRS. By contacting the IRS, they will give a list of all companies cooperating in their e-file program. It is easy to find many other free e-file sites by just searching through Google or Yahoo. The benefit of e-file is that the refund is processed quickly. Most refunds can be expected within a ten day period.

 

Applying for an Anticipated Tax Return Loan

Millions of taxpayers will apply for an anticipated tax return loan this year. It is a fairly simple process, but one that may cost between 200-2000% in interest calculated as an APR. Many firms are quoting average rates between $225-264% though. Besides paying for the online taxes to be filed, the taxpayer must pay for an application fee and interest on this usually very short loan.

The taxpayer simply applies for the loan and receives the money in 2-3 business days from the bank issuing the loan. Then the bank issuing the loan will receive their money back from the IRS usually within ten days to pay the loan off. The interest fees and application cost are deducted from the loan.

There are many places that handle these loans, such as TurboTax and H & R Block. When asked why taxpayers would pay such high interest rates, a spokesman for H & R Block said, "impatience."

Resources

"Free tax preparation for you by volunteers," .irs.gov
freefilefillableforms.org
Phillips Ebr, Kelly (January 20, 2010) "Free Tax Assistance Available in Many Forms," walletpop.com

Comparing Turbo Tax to a Qualified CPA for Income Taxes

Richard A Beauchemin and Peter B. Diaz Talk About Saving You Money

Turbo Tax is the #1 best-rated selling software for tax preparation. This article will compare them to some of the top CPA firms on the Internet.

Tax season has arrived and the ultimate question is about where to go for tax preparation. The taxpayer has a few choices, including online software tax preparers or qualified CPA firms. Both of them are vying for the tax season business and hoping to convince everyone to come their way.

TurboTax being the number one tax preparation software giant is often being compared with professional CPA firms. Which way should the taxpayer go?

 

Tim Geithner, Treasury Secretary and TurboTax

The LA Times (January 21, 2009) "Timothy Geithner: Blame me, not TurboTax" reported that the finance committee was grilling Tim Geithner (during his confirmation hearing for Treasury Secretary) on how they could trust him with a $700 billion dollar rescue fund in the worst economic times ever, if he could forget to pay his taxes for $34,000 when


For the years of 2001-2003 Geithner had missed the need to pay his social security and medicare taxes. He was asked if he used tax software to prepare his taxes and he admitted he used TurboTax.

Although there was no software error or problems with the functioning of the software itself, there were questions about the oversight or use and knowledge of tax codes. In the confirmation hearings Tim Geithner stated he was taking full responsibility for his problem and stated not to blame TurboTax.

How does Richard A. Beuchemin, CPA Compare to TurboTax?

In a recent interview on C-Span’s “Newsmakers” program, IRS Commissioner Douglas Shulman stated that he uses a tax preparer for his own returns. “I’ve used one for years. I find it convenient. I find the tax code complex so I use a preparer.”

According to Richard A. Beauchemin, CPA,  "If the IRS commissioner uses a tax preparer because he finds the tax code too complicated shouldn’t others consider it as well? In addition to the complexity of the tax code, below are several reasons why a tax payer should consider using a CPA to complete his or her tax return verses using an off-the-shelf-software program such as TurboTax:"

• Education & Knowledge - Every single CPA must take a rigorous exam to show qualified knowledge of the very comprehensive tax laws. In addition, the CPA is required to take additional hours of professional training each year to keep abreast of the new tax law changes.
• Experience - A CPA deals with a vast array of clients through the year with many different types of scenarios. He builds his experience based on this collective knowledge. Therefore if any questions do arise, the CPA knows what resources to use and where to look for a particular issue.
• Complexity and Changes in the Tax Codes - The tax code contains over 65,000 pages and is growing constantly. Because the tax code is constantly being amended and added to, there are many facets to what may seem to be a simple answer.
• Regulation of Tax Preparers - The state requires that all CPAs must comply with ethical standards set forth by the state CPA boards; maintain continual professional education throughout the year and have periodic peer reviews.

According to the IRS, there are plans to regulate online tax preparation sites. As of yet TurboTax is not regulated.

How Does Peter B. Diaz, CPA Compare a CPA to TurboTax?

According to Peter B. Diaz, CPA, "I compare TurboTax to a CPA like this: Most people use Microsoft Word. It's a great tool. It performs spell check and other checking functions. Bottom line, it does not make you a writer. If you use TurboTax you will lack the expertise provided by a seasoned tax professional to give you the extra edge you need to save and take advantage of all tax laws and sustainable tax positions on gray areas."

 

TurboTax Speaks About Tax Preparation

This year Turbo Tax is offering free e-file and free filing for anyone using a form 1040ez. The main selling point of their #1 best selling tax software is "Try before you buy." This is a great marketing campaign and will surely bring them much business.

According to their website TurboTax.com, these are the reasons to do taxes with them:

1. Get the biggest refund guaranteed - TurboTax guarantees the taxpayer will get a larger refund with them than any where else or they will refund the fee charged.
2. Covers over 350 deductions - Through their software they have a thorough questioning stage to inform the taxpayer about every imaginable deduction. They also ask the taxpayer several times if they want to go back and recheck their work.
3. Full value of charitable deductions - They have the ability on the software to let the taxpayer deduct all charitable expenses made during the year.
4. Simplifies deducting medical expenses - The software has easy calculations of all medical expenses paid.
5. Shows you where the taxpayer stands - A meter is shown through the entire process indicating the refund status so far.

TurboTax is a very simplified and unique program which takes the taxpayer through a step-by-step process. It does take a while to complete, but it is easy to use. The price varies on the product from free for the 1040ez to $129.95 for the Corporation tax software.

Summary of Comparison of CPA to TurboTax

According to Richard A. Beauchemin, CPA, "In summary an off-the-shelf tax software package, cannot replace the years of education, knowledge and experience that a CPA possesses. With an ever-increasing complex tax code that seems to change each month, a CPA is in a better position to understand a tax payer's situation and what impact a specific change or piece of tax code will have on that taxpayer."

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Photo of Peter B Diaz by permission

Best Websites for Expat Tax Preparation

Tax time is extended for anyone living overseas for an extra two months. Finding help for filing an expat's taxes is easier with these tips.

The choice between a CPA, attorney or online software should be weighed and seriously considered. The tax laws for expats may be very complicated for most. Even the state tax laws are complicated. When searching for reliable sources, there may be many, but this article will deal with only a few to compare.

 

Turbo Tax Online Software Service for Expats

Of all the online software companies, Turbo Tax appears to be the best. They are the company that is sought out the most and the one with the best track record. There have been many articles written by William Perez (about.com) suggesting to use them and then there was an article written by David Gallagher (New York Times April 15, 2008) about his experience with the online community:

"As the filing deadline looms, the Live Community feature might actually generate some feelings of community among Turbo Tax users: Hey look, we’re all stuck here doing our taxes together! The question is, do you really want to be doing your taxes with — or getting tax advice from — people who CAN’T FIND THE CAPS LOCK KEY?"

The ultimate decision should be investigated thoroughly by the expats and their families as to which firm is the best.

 

Tax Me Less.com has Expat's Services

Tax me less.com is full of information for free and it is very good. The owner, Don D. Nelson, is both an attorney and CPA. They do give warnings about the possible penalties, but they give genuine information on how to avoid those penalties. Don Nelson is located in Dana Point, California, a point in their favor with showing a valid address, not just a web page.

 

James Maertin, CPA Handles Expatriates Tax Filings

James Maertin, CPA is located in New York City, New York. His website is located at www.jamesdance.com. His fees are based on general overseas clients and list his prices freely and openly. Although the prices may seem high, they seem to be in line with general fees charged. He has a master's degree in taxation and has been in the business for over twenty years.

Websites to Avoid

As sure as it will rain in Spain, there will be websites that act unethical. Look for a website that offers knowledgeable individuals who are either a CPA (certified public accountant) or an attorney. Things to avoid would be any website threatening possible lawsuits and fines from the US government as their main reason for helping. Scare tactics are a sure sign of weakness of the site itself. There are many companies that charge huge fees for expats, so make sure to shop around.

Expats are subject to fines for not filing their foreign bank accounts of $10,000 or more. If there is no income, the expat does not have to file a tax return, except if self employed and then the social security tax must be paid. There is no explanation needed if there was no income for the past 10 years and this year there is income.

State taxes need to be filed in certain states. In some states the tax does not need to be filed. Read this article on which states require an expat to pay taxes: Expats State Tax Filing Requirements.

Summary of Expat Tax Services

It is important to find a reputable company to do any tax preparation for Americans living overseas. The tax laws are very complicated and they should be handled by a professional. Some of the online software packages are sufficient for an expat who is knowledgeable in tax preparation. If there are any doubts in how to prepare the tax forms, it is better to hire a local professional.

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